Cloud computing: Here comes the shift from price war to feature war

The recent acquisition of NICE by AWS is the latest in a series of moves by cloud vendors, as the focus of competition moves from what they charge to innovative features.

Is the cloud computing market moving out of the price war phase?

The latest acquisition by Amazon Web Services (AWS) shows how competition between the cloud computing giants is moving away from price cuts to focus more on unique features.

AWS is aiming to boost its high-performance computing capabilities with the acquisition of Italian software and services company NICE.

NICE, based in Asti, Italy, develops products to help customers optimize and centralize their high-performance computing and visualization workloads with tools for distributed workforces making use of mobile devices.

AWS chief evangelist Jeff Barr said the NICE brand will be retained and the team will continue to develop and support its EnginFrame and Desktop Cloud Visualization products. NICE said it has "hundreds of customers all over the world". The deal is expected to close in Q1 of 2016.

NICE and AWS said they will work together to create new services for high-performance and technical computing.

According to NICE, its product portfolio makes grid and cloud infrastructure more usable and user-friendly.

Its EnginFrame product is designed to provide efficient internet or intranet access to grid-enabled infrastructures, so that HPC clusters, data, licenses, batch and interactive applications can be accessed by any client using a standard browser.

The firm describes its NICE Desktop Cloud Visualization (DCV) offering as an advanced technology that enables technical computing users to access 2D/3D interactive applications remotely over a standard network.

It's not hard to see how these products would fit neatly into the AWS strategy of offering access to large-scale computing across the cloud. But it also shows how competition is evolving.

So far, it has been largely about regular price cuts for cloud computing but that could be about to change.

NICE is the fifth software design shop that AWS has snapped up in the past year, and in a research note, Pacific Crest analyst said these small software firms that address niches are become increasingly valuable as the "cloud battles shift from the 'price war' era in 2014 into the 'feature war' era of 2016 and beyond".

The analysts said such acquisitions show Amazon's increasing appetite for acquiring software design shops that could help enterprises accelerate their adoption of the AWS cloud -- and differentiate AWS services from Google Compute and Microsoft Azure.

"While most of the innovation within these three large cloud platforms has come from internal software development, we argue the tipping point of adoption within large enterprises witnessed in 2015 could spark the next big battle in cloud computing where increasingly the three largest cloud operators begin to wage a war on cloud features," Pacific Crest said.

Other AWS technology acquisitions in 2015 included Elemental Technologies, AppThwack, ClusterK, 2lemetry and Annapurna Labs.

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